Housing prices in Darwin forecast to increase by 6 per cent over the next three years

WITH a surge of first home buyers coming into the market, housing prices in Darwin are forecast to increase by 6 per cent over the next three years

With a surge of first home buyers coming into the market, housing prices in Darwin are forecast to increase by 6 per cent during the next three years

WITH a surge of first home buyers coming into the market, housing prices in Darwin are forecast to increase by 6 per cent during the next three years.

The BIS — widely regarded as the central bank for the world’s central banks — released its Australian Housing Outlook for 2018 to 2021 this week.

The report shows housing prices throughout the nation are expected to rise during the next few years, with the exception of the big Sydney and Melbourne markets.

Darwin house prices are forecast to rise by 6 per cent during the next three years, while unit prices are expected to go down by 4.5 per cent.

Real Estate Institute of the Northern Territory chief executive officer Quentin Kilian said while a six per cent increase would be a welcome boost for the Darwin housing market, he remained sceptical about the report’s predictions.

“You have to keep in mind that BIS’s forecasts are based on current conditions,” he said.

“We have an election next year and if Labor changes negative gearing that could change the whole outlook, because it risks a $12 billion hit to Australia’s housing industry.

“I put little stock in predictions and most of the economists that made these predictions didn’t see the global financial crisis coming.”

The report also found that first home buyers are surging into the Australian housing market at the highest levels in a decade. Mr Kilian said the NT had also seen a surge.

DON’T MISS OUT: AMAZING NEW FITBIT SMARTWATCH OFFER WITH NT NEWS SUBSCRIPTION

“We’ve seen a substantial growth of well over 1500 first home buyers entering the Darwin and Alice Springs market over the last two years,” he said.

“We’ve got the lowest interest rates on record and because of the downturn in the Darwin house market, median prices are equivalent to what we saw in the 1990s.

“We’ve got a perfect storm brewing at the moment with stamp duty exemptions, low interest rates, a low median price and plenty of choices for new buyers.”

With a lot more buyer activity happening in Darwin at the moment, Mr Killian said prices seemed to have stabilised.

“Whether that means the ­market has bottomed out is difficult to say right now – we should know more in six months,” he said.

“But the key element for that is population growth and at this point in time we’re still not seeing sufficient evidence on how the NT Government are going to reinvigorate the economy and population.

“Real estate is simply supply and demand, so you obviously need demand to make up growth in the housing market.”

SUBSCRIPTION OFFER: ENHANCE YOUR LIFESTYLE WITH FITBIT SMARTWATCH

QBE Lenders’ Mortgage Insurance chief executive Phil White said the first home buyer market was the strongest it had been since the Federal Government’s post-GFC stimulus package delivered $1.5 billion to the sector.

“Lenders’ responses to regulatory restrictions have contributed to the softening of the market. State government incentives have encouraged first home buyers to enter the market after several years of being pushed out by domestic and foreign investors,” Mr White said.

Millennials, born between 1981 and 1996, were the most influential group in the country’s property market and had been largely responsible for the record demand for new apartments and units in cities over the past decade, “providing a steady stream of tenants to occupy these dwellings”, the report states..